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114 Cards in this Set
- Front
- Back
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Regimes
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-System of gov’t
-scale of most democratic to least democratic (autocratic) |
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Democracy
full electio w/ competition w/ full vote (suffrage) and no massive fraud combines with civil rights (freedom of the press, speech, assembly and association\ different levels of defining democracy minimal more complex liberal democracy substantive, outcome based development causes democracies |
-full election w/ competition w/ full vote (suffrage) and no massive fraud
-combines with civil rights (freedom of the press, speech, assembly and association\ |
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different levels of defining democracy
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-minimal
-more complex liberal democracy -substantive, outcome based |
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Polity IV index
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-10 → 10
-used measures constraints on executive competitiveness of exec recruitment openness of executive recruitment competitiveness of popular participation |
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democracies cause development
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-democracies create better property rights
democracies spur innovation which creates better technology which causes development -free press and oppositions hold govt accountable |
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property rights
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-democracies make property rights secure which spurs development
-democracies secure property rights by constraining its rulers through institutions |
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democracies bad form economic development
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-inefficient
-short time horizon goals caused by elections -inefficient redistribution and poor taxation policies -rise of unions which create pressure on wages / inflation -more vulnerable to a shift from investment to consumption -hinders growth by reducing investment -production may be higher under auto |
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(modernization theory)
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Lipset
-development brings urbanization, increase in the -quality of life, increase in education and literacy and advancement in technology -development changes social structures -increased education broadens electoral knowledge and opinions and increases the citizens capacity to do so |
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A-J-R model
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-people known what they want and will allow an regime who benefits them the most
-causes distributional conflict resolved by who has the most political power -rich don't want dem, poor do -poor have de facto power (revolution) -rich have de jure power(excluding citizens) -transition only happens when poor want the transition and the rich are willing to give it rich must feel threatened -if the rich feel like there is an reasonable threat to be overthrown they will give in -rich give dems in order to avoid costly revolutions, same w/ poor |
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Kuznets curve
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-as development occurs, inequality increases and then decreases
-reduction of inequality happens because of increase in skilled workers (Williamson) -income redistribution through taxation modernization theory gets you to the apex of the curve -redistribution of wealth |
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hoe to the plough
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-men worked outside the home and women inside
-created the "home" as the place for the women -lower female force participation -lower women ownership of firms -less seats in national legislature |
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empowerment boosts development
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-female education boosts gross by increasing labor participation of women, increase of labor
-giving the franchise |
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women vote differently
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-close different politicians (selection)
-choose the right types -encourages the good type -prospective voting |
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men and womens digergance
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-women are more liberal
-favor redistribution, public good, child welfare -support redistribution |
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horizontal accountability
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-govt institutions to one and other
-local govts get audited, there are court orders |
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vertical
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-top down
local govt are accountable to central govt -bottom down govt are accountable to citizens |
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How to hold people accountable
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-voting
-campaign contributions -petitioning -lobbying -supplication -pleading -protest -collaborative problem solving |
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principles holding agents accountable is dependent on
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-ability of principle to hold agents to account
-need information -must be able to interpret information -agents time horizons matters -willingness of principles to hold agents to account |
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Guharat (India)
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-great deal of pollution
-poor compliance with environmental regulations -auditors are chosen and paid for by the firms |
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Sen
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-no famine has ever happened in a democracy
-perhaps changing govt to democracies will mitigate famine |
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Besley and Burgess (2002)
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-an increase of 1% in newspapers, means a 2.4% increase in public food distribution and a 5.5% increase in calamity relief
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Uganda: does transparency improve performance of govt?
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-create scorecards for randomly chosen members
-randomly disseminate information about members performance -non partisan -voters updated their attitudes for the short term and Hawthorne effect are possible -members didn't improve their performance |
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transparency didn't affect outcome
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-wrong information
-implementation failure -lack of political competitiveness -members pay attention to parties, and not to voters political interference |
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Resource Curse
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-phenomenon where resource abundant countries have poor outcomes to include
-as you have more resources, you have lower growth |
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spanish empire
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-transferred gold and silver from LA to spain without development in spain
-lagged behind ever since -institutions of private property was undermined by resources -silver caused massive amount of debt from war and stupid expenditures (monasteries) |
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oil in the middle east
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-oil production reduces women in the work force, which reduces political influence and freedom
suggest growth (resource led) doesn't lead to greater freedom -since many oil producing countries are not in the middle east, oil, not islam, hold women back |
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examples of bad resources
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-diamonds, oil, minerals,
characteristics -resource concentration -high value per weight -high rent component -high profitability; low need of investment to get product to market; low need for processing; easy to extract |
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economic mechanisms to explain RC
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-resources crowd out manufacturing
-Dutch disease -price volatility |
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resources crowd out manufacturing
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economic mechanisms to explain RC
-lewis two sector model --manufacturing is essential for growth --more productive; greater spillover (more allied industries do well (auto industry) -NR booms lower incentives to diversify into manufacturing -creates negative consequences for long term growth |
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Dutch disease
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economic mechanisms to explain RC
-NR booms lead to inflow of foreign exchange, increases the price of local currency -also crowds out -home countries exports / tradables become expensive -increases govt spending, debt -reduces economic growth, leads to external sector imbalances -imports > exports |
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price volatility
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economic mechanisms to explain RC
-creates boom and bust cycles -risk aversion causes people to under invest -difficult to plan form which causes under investment -leads to entry and exit to market which is costly |
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political mechanisms to explain RC
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-resources undermine institutions
-promotes Armed conflict / war |
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solution to RC
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-don't drill
-long term contracts reduce volatility -reduce foreign exchange inflows through keeping -money abroad (sovereign nation fund) -make fiscal policy transparent, anti cyclical -don't spend during booms -diversify industry -distribute royalties directly to citizens and tax citizens (moss) -money doesn't go to state so no corruption |
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Horowitz 1985 ethnicity
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-ascriptive identity generally inherited at birth and including language, tribe, caste, race, religion region
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Weber 1922
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-human groups that entertain subjective belief in their common descent because of similarities of physical type or of customs or both, or because of memories of colonization and migration
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ethnolinguistic fractionalization (ELF)
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-prob that any two randomly chosen people in a country have two different native language
as ELF increases ethnic diversity increases -becomes a bimodal distribution |
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why ethnicity matters
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-it gives people a sense of meaning
-makes it easier to organize / coordinate for collective action, incl making it easier to facilitate communication -generates shared values, preference goals |
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primordialism ethnicity
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-something you are born with or that emerge through deep psychological processes
-one cannot choose one's identity or change it resonates with power/emotion of groups identities, salience in response’ to threats |
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constructivism
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-identities can be changed through context, everything is subjective
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uneven industrialization (gellner)
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agrarian societies
-peasants cared about taxes and security -people were loyal to their lord -the identity of their sovereign was irrelevant industrial societies -there was a need for clerks and literate workers -loyalty is to the nation -identity of leaders matters |
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the rise of print capitalism (anderson)
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-boom in mechanized publishing in 1500,
-capitalism drove a search for a greater audience printed languages helped create a national consciousness (imagined communities) by establishing unified languages below the difficulty of latin giving a fixity to language -made some vernaculars more powerful than others publishers printed in those most likely to attract an audience |
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remedies for ethnic diversity
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-partisan, to divide up, create homogeneous nations
create homogeneous sub-national units -manage diversity |
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how do the countries interact?
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-international institutions
-economic activity -immigration -security -technology -environmental |
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international trade
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-the movement of goods and services across borders
balances supply and demand, production and consumption across borders -does not have to occur through the physical movement of goods |
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why are exports good for growth
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-part of GDP
-specialization in your comparative advantage -able to increase output more through efficiency -open borders allow for the transfer of technology and -creates more innovation |
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welfare cost of barriers to trade
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-tariffs are the most common but there are others, such as quotas
-these raise prices, which reduce domestic consumption and boost domestic production -consumers are harmed and producers benefit because their inefficiencies are subsidized |
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African growth and opportunity act
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-enhances US market access for 40 sub saharan countries 2000-2015
-provides exports of a certain good (textiles and ag) from beneficiaries duty free access to the us market -spurs new industries such as horticulture |
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Problems with foreign aid
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-govt have multiple overlapping objectives
-democratization vs US interest -tension between country ownership of foreign aid and the wanting of the donors to dictate where their money goes to -donors don't listen to beneficiaries -cookie cutter approach -a lack of donor coordination -donors don't learn -still not clear that programs that we fund help over time donors aren't punished for failures "something has to be done" syndrome so money is just thrown out the door without thinking about the benefits |
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two costs of barriers to trade
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-lost gains from trade
-wasted resources from higher-cost production |
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some partial solutions for aid problems
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-start small
-reward performance -learn -incentivize |
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start small solution to aid
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-instead of massive, grandiose goals (saving the world, ending world's poverty) we may want to concentrate on small, concrete goals that can be completed (Banerjee and He 2003)
-subsidies to families for health and education for their children -uniforms and textbooks -school vouchers -deworming drugs and nutritional supplements -vaccinations -HIV prevention -indoor spraying for malaria, bed nets -fertilizer clean water |
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millennium challenge corporation (MCC)
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rewards good growth-enhancing policies in three areas
-ruling justly (lack of corruption) -investing in people (good education, health policy) -encouraging economic freedom (reduce trade barriers) -countries that score above the median on indicators of these criteria are provided large sums of money for specific programs, where they are held accountable for |
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learn solution to aid
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-randomized control trials are the "gold standard" for learning
-the effect of intervention is the outcome in the treatment group minus the outcome in the control group |
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Issues with RCT
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-some programs cannot be randomized
-ethical difficulties -RCTs are good estimates causal effects, but less good at ascertaining mechanisms |
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Banerjee et al 2013) on microloans
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-households are more likely to have microfinance loans
-high amount of repayment -not more likely to start a business -no effect on monthly consumptions, profits, health, education, women's empowerment |
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progresa oportunidades, méxico
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-conditional cash transfer
-cash is dependent on school attendance and preventative health care -hugely successful -improves immediate welfare and longer term outcomes -has been scaled up and employed elsewhere |
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AIDS and changing sexual behaviour (Duflo, dupas, kremer)
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-randomized districts to teach each district 1 of 4 programs
--class that train teachers in an HIV/AIDS curriculum -----teaching had no effect on teenage childbearing --students debates about the use of condoms -----debates had no effect on teenage childbearing --girls are taught that it is dangerous to accept gifts from older men ------reduced teenage childbearing by older men --girls are given uniforms ------reduced dropout rates, reduced teenage childbearing and marriage cost of uniform is $12 |
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education and deworming Kremer and Miguel (2004)
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30,000 children in Kenya. Follow on surveys were done in 2004 and 2007
-improved health of treated, and neighbors -reduced school absenteeism by 25% -no impact on test scores -increased moves to better city schools -increased height, weight and improved health (after three years) |
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problems with drugs as aid
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little medical research for developing country diseases
-poor world govt cant, dont fund research -vaccines are a global public good -companies don't fund research, file patents because the markets are too small -states cannot credibly commit to buying doses at a reasonable price |
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Advance Market Commitment
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-accelerates the manufacture and delivery of vaccines
-donors commit funds for new vaccines that meet stringent criteria at a prearranged price -this incentives manufacturers to invest in R&D for new vaccines -manufacturers commit to supplying |
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poverty traps
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-income today on the x axis, income in the future on the y
jeff sax (geography view of development) -your income tomorrow is always going to be less than your income today -you need massive amount of aid to get out of the trap -the technology needed to get out of the trap might be useless at a point |
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international migration
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-movement of people across international boundaries for a sustained period of time (permanent or temp)
-temporary is often circular -harvesting of crops in the fall and then return to their home country after wards |
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determinants of migration
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-push-pull factors
-93% of migrants migrate for economic reasons emigration -decreases w/country size -larger countries will have less migration -people prefer internal migration -decrease w/development -decreases w/institutional quality -decreases w/distance |
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who migrates
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-not a random subset
-not the poorest of the poor -usually the best and brightest that leave because of the high cost of immigration -usually the second rung |
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migration's negative effect on countries
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-reduction in human capital, employment
-losses acute in important sectors, such as health, education -causes fiscal losses, esp if education is subsidized -since emigration stimulates innovation in destination countries, it increases the tech gap -high barriers to tech diffusion might might make this a long term problem |
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positive effects on countries
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-people therefore have incentives to invest in education to migrate
-possible brain gain -temp, return migration boosts incentives for human capital investment returnees bring work experience, foreign values |
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effects of diaspora
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-foreign direct investment
-trade -easy access to debt (diaspora bonds) -democratic values -other behavioral norms such as fertility |
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effects of remittances
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-funds sent by migrants to their home country
-these can be huge amounts of money -less volatile than other ways to send money home -have significant impact in reducing poverty through -increased income of recipient households -smoothing consumption easing capital constraints -allow households to invest in education, health, etc. -have marginal positive impact on economic growth in some countries through |
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migration restriction problems for developing countries
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-treat people as property of the state
-ignore the huge positive effects for individuals -ignore the oftentimes positive systemic effects -impede the formation of ghost, boom countries |
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immigration policies for development
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-open borders
-facilitation of temp migration --guest worker status -facilitation of remittances -support for Diasporas' development projects in origin countries -training programs designed to prevent negative brain drain |
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economic effects of civil war
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-harm growth through the deterioration of physical capital, human capital, labor, technology, institutions
-deterioration happens through -destruction of people, stocks, infrastructure social disorder due to violence, insecurity -diversion of expenditures to unproductive uses (bombs, tanks) -capital flight |
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post war recovery
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-physical capital recovers quickly
-human capital, institutions recover more slowly -this can lead to a "conflict trap" where countries revert to violence |
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grievance based theories of civil war
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-people are oftentimes aggrieved and this leads to violence
-these grievances often occur along class or ethnic lines -grievances are thought to form when people are relatively deprived, relative to their expectations but grievances and ethnic differences are far more common than wars |
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activation of some grievances
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-food shortages
-lack of institutions -ethnic cleansing -collective action problem lead by a radical |
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opportunity cost theories of war
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-wars occur when the cost is less than the benefits
-so anything that reduces costs or increase the benefits increases the prob of war --easy rebel finance (natural resources, diasporas) increase the benefits of war (greed) --weak state capacity to deter rebellion or civil war (partially due to terrain) lowers the cost of war |
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leader/warlord incentives
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war/disorder can be useful if leaders don't suffer its costs.
weaken opposition increase ability to steal having war when it is rational to predate rather than protect the post war reduction in aid and the push for democratization in africa reduced leaders' time horizons and made predation rational. Natural resources worsened the situation (Bates 2008) |
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bargaining failures
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-fighting is costly, and so peace is better
-bargained outcomes are therefore better for all -it is irrational to fight --rational to split resources as if there had been a war, and to then further divide the resources saved by not going to war |
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wars occur because of
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-asymmetric information about costs/benefits
-commitment, enforcement problems -indivisibility of resources -agency problems between people leaders ---the leader is not bearing the costs of war |
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how to restore and maintain peace
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-third party
-peacekeeping operations -foreign aid |
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third party intervention
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-creates credible commitments
-regan finds that interventions increase civil war duration, since they cause opposing interventions -they increase the probability of a military solution on the side that is favored -some evidence that strongly biased interventions are more effective |
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peacekeeping
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-PKO consist of military, police and civilian personnel, who work to deliver security, political and early peace building support
-helps reestablish institutions/frees up resources -information share -very effective |
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aid and conflict
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-make the state stronger
-raise OC of fighting -lessen grievances |
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Acemoglu
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-rich had to give franchise to poor because of the threat of revolution
-industrialization leads to inequality which leads to unrest and democratization |
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Przeworski
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against dems
---hinges growth by reducing investment ---production may be higher under auto form dems ---fosters growth by promoting allocation efficiency ---use of resources may be more efficient |
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Duflo
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-gender equality will go away as poverty diminishes
-gender equality is an prerequisite for development -poverty and lack of opportunity breed inequality between men and women; when economic development happens it helps women on two fronts |
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Sen
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-women are underrepresented in asia
-western civilization is less sexist than eastern -underdevelopment in country's lease to unequal nutrition and health care for women gainful employment helps jobs with security and legal protection help |
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Banerjee
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Lives of the poor
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Pritchet
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Divergence
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Lerner
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Grocer and the chief
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Sen
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Freedom and development
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Bates
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Coercion
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Kakaria
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Culture and Singapore PM
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Putnam
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-Italy, state divergence in north and south
-Civics and institutions are the key |
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Sachs
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Geography makes a difference in poverty vs. wealth
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Putnam
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NZ and geographical difference in development
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Williamson
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WC
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Easterly
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Different models of development
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North
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Need for solid political institutions that don’t change
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Acemoglu
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Different colonial states
Extractive vs. neo European |
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Krugman
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Japanese slowdown
Comparison between four dragons and USSR |
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Chang
Trade barriers |
Trade barriers
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The Harrod-Domar Model, 1946-2000
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-The idea that aid-financed investment in dams, roads, and machines would yield growth
production capacity was proportional to the stock of machinery -The difference between the required investment and the country’s own savings is called the financial gap -Domar’s approach became popular because it had an simple prediction -GDP growth will be proportional to the share of investment spending in GDP |
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Solow Theory
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-investment in machinery cannot be an source of growth in the long run
-increasing machines was not an feasible way to sustain growth |
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Washington Consensus
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-Came from the collective thought in DC on what was needed for development
-10 different things from tax reform to securing property rights to trade liberalization |
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Rostow
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Passage of time
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Ger
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International competition
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Lewis
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Savings/investment, capital
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H and D
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Saving, investment, capital
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Solow
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Tech
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Endogenous growth
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Tech which is due to human capital
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Arthur Lewis's two sector model
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Traditional sector
---Large ---Labor intensive ---Low labor productivity ---Sustenance Econ modern sector ---Small ---Capital intensive ---High labor. Productivity |
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Rostow stages of economic growth
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Traditional societies
Preconditions to take off Takeoff Drive to maturity age of mass consumption |
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endogenous dems
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dems are more likely to emerge as the countries become richer
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exogenous
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dems emerge because of other reasons(ones we may not know) but dems can only survive if you are rich
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